Compared to last year, Baltic companies were more cautious and less optimistic when answering the question «How would you compare your country’s economic perspective in comparison to the previous year?», according to results of German-Baltic Chamber of Commerce’s survey on entrepreneurship and investment environment.
The number of entrepreneurs who expect 2019 to be better than the last has declined by more than 20 percentage points in Latvia, Lithuania and Estonia. This trend is also observed in relation to the question regarding outlooks for specific business sectors, the study shows.
Looking at responses based on location criteria shows that when compared to last year, legal security has reduced. On top of that, this trend is observed in all three countries, including Latvia. Businessmen in this country have become less optimistic towards predictability of infrastructure and economic policy.
On the other hand, companies present in Latvia notice improvements in multiple other areas, such as state governance and tax administration.
According to survey results, entrepreneurs’ predicted labour cost increase remains high in all Baltic States (7.47% in Latvia, 8.33% in Lithuania, 8.31% in Estonia).
More than half of companies admit that the shortage of labourers increases labour costs. This means the shortage of qualified workers significantly undermines future growth, researchers say. The rise of labour costs, which remains high, also negatively affects attractiveness of investments.
The survey shows that Baltic States remain one of the most attractive place for investments in central and eastern Europe. However, only Estonia can be proud of improvement, taking the lead from Czech Republic. Lithuania and Latvia remain on the same spots they occupied a year ago.
This spring’s annual Conjuncture Survey is part of the international survey in Central and Eastern Europe. Answers regarding the situation were provided by more than 1,400 members of German Foreign Chamber of Commerce in 16 countries. This includes more than 100 companies from Baltic States.